Government may pull ads from NoW as outrage grows

Stunned: former Army chief Lord Dannatt said he was astonished by the hacking allegations

The Government was today considering severing advertising links with the News of the World after claims that an investigator may have hacked into the phones of the grieving families of dead soldiers - and a string of high street giants rushed to pull adverts from the Sunday tabloid.

Commons Leader Sir George Young confirmed that the Government was urgently "reviewing" its advertising contract with the News of the World.

As fury mounted, the Royal British Legion ended its campaigning partnership with the paper - accusing it of "inhuman behaviour" if the claims of targeting bereaved families of servicemen and women killed in Afghanistan or Iraq were proven.

Defence chiefs and military families were horrified by the latest allegations. In other revelations, the Independent Police Complaints Commission is to investigate claims that Metropolitan Police officers were said to have taken up to £100,000 in payments from the News of the World.

Lawyer Michael Mansfield QC may have been targeted in an attempt to uncover stories about Diana, Princess of Wales. As a result of the allegations, a decision on Rupert Murdoch's News Corp's bid to take over BSkyB may be delayed until September.

A number of major brands have already suspended deals with the newspaper, including the Halifax bank, Virgin Holidays, The Co-operative Group, Vauxhall and Mitsubishi.

Tesco, though, stopped short of suspending its advertising in the newspaper. Details of families of troops who died fighting for their country were allegedly found in the files of private investigator Glenn Mulcaire.

Michele Price, a Royal British Legion lawyer, said: "I feel that my families would expect inhuman behaviour on a remote battlefield but not at the hands of Fleet Street." Fellow legion lawyer Kevin Hart said: "The Royal British Legion does its utmost to provide assistance and comfort to these families, who deserve the nation's utmost gratitude and respect.

"To think anyone would exploit their grief is frankly sick-making."

Relatives of servicemen and women killed on the frontline and military chiefs reacted with horror to the latest phone hacking claims.

Rose Gentle, the mother of fusilier Gordon Gentle, who was killed by a roadside bomb in Basra in 2004, said: "It's like a living nightmare, just waiting for a knock at the door again to be told some bad news."

Lesley Hicks, 62, mother of Captain David Hicks - who died in August 2007 and was posthumously awarded a Military Cross for bravery - said: "It is appalling. It is a very difficult day for us. It is raking up a lot of memories."

Sir David Richards, the Chief of the Defence Staff, said: "If these actions are proved to have been verified, I am appalled. I find it quite disgusting."

Defence Secretary Liam Fox said if true the intrusion would be "an outrageous breach of trust".

Former head of the Army Lord Dannatt and Lord West, who was the Navy's First Sea Lord, were both astonished by the claims given the News of the World's campaigning for the armed forces.

Lord West said: "If this is correct, then there is a large element of hypocrisy."

A News International spokesman said: "News International's record as a friend of the armed services and of our servicemen and servicewomen is impeccable.

"If these allegations are true we are absolutely appalled and horrified."